Intergenerational Mobility and the Timing of Parental Income

102 Pages Posted: 16 Nov 2015

See all articles by Pedro Manuel Carneiro

Pedro Manuel Carneiro

University College London - Department of Economics; IZA Institute of Labor Economics

Italo Lopez Garcia

RAND Corporation

Kjell G. Salvanes

Norwegian School of Economics (NHH) - Department of Economics; IZA Institute of Labor Economics

Emma Tominey

University of Bristol - Leverhulme Centre for Market and Public Organisation (CMPO)

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Abstract

We extend the standard intergenerational mobility literature by modelling individual outcomes as a function of the whole history of parental income, using data from Norway. We find that, conditional on permanent income, education is maximized when income is balanced between the early childhood and middle childhood years. In addition, there is an advantage to having income occur in late adolescence rather than in early childhood. These result are consistent with a model of parental investments in children with multiple periods of childhood, income shocks, imperfect insurance, dynamic complementarity, and uncertainty about the production function and the ability of the child.

Keywords: child human capital, intergenerational mobility, parental income timing, semiparametric estimation

JEL Classification: J24, E24

Suggested Citation

Carneiro, Pedro Manuel and Lopez Garcia, Italo and Salvanes, Kjell G. and Tominey, Emma, Intergenerational Mobility and the Timing of Parental Income. IZA Discussion Paper No. 9479, Available at SSRN: https://ssrn.com/abstract=2690728

Pedro Manuel Carneiro (Contact Author)

University College London - Department of Economics ( email )

Gower Street
London WC1E 6BT, WC1E 6BT
United Kingdom

IZA Institute of Labor Economics

P.O. Box 7240
Bonn, D-53072
Germany

Italo Lopez Garcia

RAND Corporation ( email )

1776 Main Street
P.O. Box 2138
Santa Monica, CA 90407-2138
United States

Kjell G. Salvanes

Norwegian School of Economics (NHH) - Department of Economics ( email )

Helleveien 30
N-5035 Bergen
Norway
+47 5 595 9315 (Phone)
+47 5 595 9543 (Fax)

IZA Institute of Labor Economics

P.O. Box 7240
Bonn, D-53072
Germany

Emma Tominey

University of Bristol - Leverhulme Centre for Market and Public Organisation (CMPO) ( email )

12 Priory Road
Bristol BS8 1TN
United Kingdom
+44 117 928 9019 (Phone)

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